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Finance minister unveils Economic Survey 2020-21

Finance minister unveils Economic Survey 2020-21
June 10, 2021

ISLAMABAD (92 News) – Federal Minister for Finance Shaukat Tarin on Thursday unveiled Economic Survey of Pakistan and gave credit to the government policies for economic stability.

Addressing his pre-budget 2021-22 press conference, the finance minister said that the current government’s decisions helped stabilize the national economy.

GDP Growth

"While the government itself projected GDP growth rate at 2.1pc, the IMF and World Bank predicted even lower. The government’s decisions such as giving incentives to manufacturing and textile industries as well as construction and agriculture sectors helped the economy recover,” he explained.

Shaukat Tarin pointed out large-scale manufacturing (LSM) grew by 9 per cent, while the agriculture sector growth was recorded at 2.77 per cent against a target of 2.8 per cent.

Current Account Surplus

The finance minister thanked the overseas Pakistanis, saying country is in current account surplus due to record remittances from fellow citizens working abroad. He maintained that remittances have touched an all time-high of $29 billion.

“The increase in remittances embodies overseas Pakistanis’ trust in the prime minister. Remittances are an angel from Almighty Allah,” he mentioned, adding current account is in surplus due to the record rise in remittances. He said the State Bank of Pakistan’s (SBP) reserves have risen to $16 billion.

FBR harassment to end

Speaking about the FBR, Tarin said he would end the practice of people being harassed by the bureau. "FBR will not audit [businesses or persons] but a third-party audit will be conducted," he added. He said once the third-party conducts its audit and finds a party guilty, that individual will be thrown into jails.

Inflation

Talking about inflation in the country, the minister said that Pakistan is now a net food importer country so it is subjected to international price fluctuations; however, government tried its best to not pass on those effects to public.

IMF

Shaukat Tarin said that IMF is pressurizing the country to increase power tariff; however the premier has refused to hike price of electricity. He also reiterated government’s intentions to sell loss making entities and government plans have been made to turn such entities into profit making entities and then sell them.

The minister further said that increase in tariff is not a solution of circular debt issue and IMF also demands of increase in the tariff and personal income tax but government cannot do that so negotiations with the fund are still going.

He added that IMF wants to increase income tax collection from around Rs113 billion to Rs150 billion but government has presented an alternative path to the institution.

Ehsaas Program

The minister said that Ehsaas Program provided support to 15 million families while, Prime Minister Imran Khan’s Kamyab Jawan Program also gave benefit to thousands of people. "I have stressed to PM that now government needs to work on economic growth instead of stabilization in order to provide jobs to youth and provide relief to the poor segments of societies."

Energy Challenges

Shaukat Tarin said Pakistan's economy was burdened due to the overcapacity in the power sector, saying that "it was a very big challenge and a black hole" for Pakistan.

"We have to continue to make capacity payments as a result," he said, adding that even if Pakistan continued to grow at 4,5 or 6% in the next couple of years, the extent to which Pakistan had overbuilt, it is not possible for the country to utilise that capacity.

Tarin said the government will not resort to increasing tariff time and again, saying that it will have a cascading effect on inflation. "Indirectly, even the poor will be burdened with inflation over it," he said, adding that the government will take 7-8 years to eliminate circular debt.

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